Five key priorities for delivering effective advertising

WARC today releases ‘Anatomy of Effectiveness: 2022 Edition’, a white paper giving brand marketers, advertising agencies and media owners a fresh perspective on the five key building blocks of effectiveness.

Why it matters

Much has changed since WARC published the first Anatomy of Effectiveness in 2019, David Tiltman, SVP Content, WARC, observes: “We’ve had a pandemic that saw budgets switch out of brand investment into performance marketing; we’ve seen the rise of ‘retail media’ platforms that are reshaping the media landscape; and with the impending death of the cookie we see a growing lack of confidence in advertising and media measurement.

“This updated edition of our white paper draws on new thinking and the latest evidence to present the key building blocks required to deliver commercial impact today.”

Five priorities

• Invest for growth

Understanding how factors such as brand size, campaign investment and category dynamics will determine effectiveness are key first steps when it comes to setting budgets and agreeing on objectives. Getting the right framework for investment is crucial if a campaign is to meet its potential.

• Balance your spend

Set the right framework for investment to ensure sustainable success. Whether it is long-term effects vs short-term sales impact, brand-building vs performance marketing, broad reach vs active in-market buyers or upper funnel vs lower-funnel, plan for effectiveness across different timeframes, messaging, audience types and buyer journeys to deliver maximum growth.

• Plan for reach

Campaign reach is becoming harder to achieve as media consumption fragments. This is forcing marketers to reconsider long-held assumptions about reach and frequency management. Factors to be considered include brand objectives, media selection and consumer purchase habits.

• Be creative

Creativity makes a difference and is the most powerful weapon under the marketer’s control. There is widespread evidence that creativity delivers increased effectiveness when it is distinctive, engaging, emotional and has some longevity. Recent research cited in LIONS’ State of Creativity 2022 study claims only 8% of agencies feel confident in convincing clients to invest in high-quality creativity and 12% of clients feel confident in convincing the CFO to invest in high quality creative.

• Plan for recognition

Advertising must be associated with the brand behind it, if it is to work. Planning for recognition involves creating shortcuts in consumers’ minds that make brands more memorable, impactful and easy to recall. Failure to brand communications properly is a common pitfall. Investing in and nurturing distinctive assets will enable quick recognition.

The white paper, launched in conjunction with WARC's Anatomy of Effectiveness hub, features new case studies, expert opinions and over 20 'Evidence' decks. WARC clients can read the full report here. A sample edition is available for all.

Highlights from the white paper will be presented to Cannes Lions attendees today as part of a full week’s worth of content curated by WARC, together with the world’s leading effectiveness experts, covering strategy, media, creative and digital commerce. For more details on WARC x Cannes Lions, click here. 

Employee comms becomes a CMO priority

Communicating with a brand’s employees has long been relegated to corporate newsletters or town hall meetings, but CMOs are increasingly looking to their own employees for inspiration as the brand values become more of a recruitment consideration.

Why it matters

Increasingly, marketers need to work with other functions within the organisation – such as human resources – to further the aims of the whole business.

“This is a key area where brand can play in terms of attracting future talent,” said Ty Heath, Director, Market Engagement, The B2B Institute at LinkedIn, following her presentation at the Cannes Lions International Festival of Creativity. “People see how powerful your brand is and want to work for your brand, which lowers your cost to have them join and helps them stay at your company much longer. 

“All in all, it’s something marketing can bring to an organisation in partnership with the human resources team,” she said. 

What CMOs are saying on the Croisette

“By opening up meetings to 300-400 people – optionally – for full transparency, authenticity [becomes] our internal medium and agenda….it increases employee engagement, their perception of being part of it and being able to contribute to discussions” – Attila Cansun, CMO, No7 Beauty Company.

“The question you always have to ask yourself as an employee is: do the organisation which I work for and my values align to each other? And sometimes they don’t. If they don’t, that’s okay, you can pivot out. For us, it’s about always having conversations” – Sandra Lopez, CMO, Microsoft Advertising.

“In a world where consumer expectations and employee expectations are constantly changing … you’ve got to move with it, you can’t just sit there and be upset that they did” – Lindsay Radkoski, VP - National Marketing, Wendy’s USA.

“There’s one more stakeholder not to be forgotten: HR. We are in the deepest war for talent ... So where’s our position? How do we stay attractive?” – Christian Deuringer, Head of Global Brand Communications, Allianz.

Ads in a relevant context boost favourablity and intent metrics

Increased consumer attention for contextually relevant ads leads to greater purchase intent and brand favourability, new research from Integral Ad Science shows.

Why it matters

With a cookieless future on the horizon, marketers are seeking alternatives to maintain and improve their advertising ROI. The Ad Context & Attention study from IAS, using eye tracking technology from Tobii, highlights the role that context may play in this regard.

Takeaways 

• Contextual targeting strategies yield stronger consumer attention: The in-context ad was the first page element consumers noticed. It took just 0.4 seconds for consumers to notice the in-context ad vs. 1.0 seconds to notice the out-of-context ad when viewing the article. 
• Contextually relevant ads boost brand favourability and consumer purchase intent: Purchase intent was 14% higher among consumers who viewed the in-context ad. This ad also generated a 5% higher brand favourability compared to the out-of-context ad. 
• In-context ads generate higher memorability and increase brand recall and awareness: Consumers were four times more likely to remember a brand, unaided, after seeing an in-context ad versus an out-of-context ad. In general, in-context display ads were more likely to be considered interesting, easy to read, clear and informative.

Key quote

“Desired outcomes can be significantly influenced through contextually relevant ad placements. There is a massive opportunity for brands … to amp up the power of their campaigns and affect the bottom line ” – Tony Marlow, CMO, IAS. 

Sourced from IAS

Luxury experts hope for downturn not recession

An “economic slowdown”, driven by volatile factors like the war in Ukraine, is forecast by 59% of luxury experts in a recent survey to lead to a downturn in the industry, compared with 41% who think a full-blown luxury recession is coming.

Why it matters

Periods of financial stress cause many people to choose not to make bigger-ticket purchases. And even affluent shoppers often decide against conspicuous consumption when the economy is facing tough times. Luxury brands must find the right equation to serve their target audience while providing a level of indulgence for active category buyers.

Takeaways

• Though spending on necessities such as food, housing, and technology is projected to remain steady through economic crises, the luxury industry could see significant effects. This was according to a survey conducted by the research firm the Luxury Institute of its Global Luxury Expert Network (GLEN) members, a group of industry leaders around the globe, including chief executives, senior executives, consultants and industry  experts.
• A luxury downturn or recession will have differing effects on separate luxury sectors. For example, watches and jewelry are expected to take a medium hit in the event of either scenario, and luxury real estate is in a precarious spot as well, for most demographics excepting the highly affluent.
• In contrast, wines and spirits, beauty and health and wellness are all categories that experts predict will face minor hits during a downturn or recession, given their increasing value as necessities for millennial and Gen Z consumers.
• Experts view department stores as the most vulnerable institutions operating in the luxury category, due to their “historically high overheads, high inventories, and low margins”.
• A potential recession could have particularly outsized effects in Europe, given the pressure placed on commerce by the war in Ukraine. In North America, the effects will presumably be less, but still felt.

The big idea

“Downturns and recessions spawn major opportunities. This may be the worst of times; if you act with courage, skill, and conviction, you can make it the best of times” – Milton Pedraza, CEO of the Luxury Institute.

Sourced from Luxury Institute

"Creative data" can improve ad effectiveness

Artificial Intelligence (AI) can help brands understand “creative data” at scale, and so identify the shared traits of their most impactful ads.

Why it matters

“Creative data” is a new frontier for brands that are seeking to maximise the impact of their communications. Through assessing a sizable volume of ads, artificial intelligence can unlock insights regarding the precise creative elements that are most associated with success.

Takeaways

Anastasia Leng, CEO of CreativeX, a firm that deploys AI to assist brands in enhancing their ads, discussed this topic in a session held by WARC at the Cannes Lions International Festival of Creativity 2022:

• AI software can analyse the content of huge numbers of ads at a granular level – say, logo placement, music use and diverse representation in casting – and help brands delineate the granular features of their communications output. (WARC subscribers can read more here.)
• At the micro level, she explained, this “creative data” reveals numerous tiny details about an ad – information, Leng conceded, that is of limited worth in isolation.
• Undertaking such an investigation at scale, however, yields significant insights, and can help develop automated tools for brands to quickly determine if their creative has the desired traits.
• Major advertisers like consumer goods firms Nestlé and Unilever, as well as brewers Heineken and Anheuser-Busch InBev, have leveraged this approach and yielded significant results.

The big idea

“Creative data is basically an untapped asset class. We all have it – we all have a ton of it. We sit on it. And it’s ours. But we haven’t been able to actually harness it and cluster it” – Anastasia Leng, CEO, CreativeX.

UK consumers are grappling with a stark new economic reality

The worries of UK consumers are laid bare in two new pieces of research that show consumer confidence hitting an all-time low for the second month in a row and almost one third of people fearing their personal or household financial situation isn’t secure.

The consumer mood is dark

A year ago, GfK’s long-running Consumer Confidence Index stood at -9; today it’s at -41. Joe Staton, Client Strategy Director at the market research company observed that “With prices rising faster than wages, and the prospect of strikes and spiralling inflation causing a summer of discontent, many will be surprised that the index has not dropped further”.

Spending is being cut

Inflation (as measured by the Consumer Prices Index) hit 9.1% in May, up from 5.5% in January. So it’s little surprise that data from audience insights company GWI shows 90% of UK consumers feel the cost of living is more expensive compared to six months ago.

A majority (62%) have felt a moderate/dramatic impact from inflation, while, more alarmingly, 30% say they are feeling insecure about their finances. 

Rising costs are being noticed by higher and lower earners alike, GWI notes, with 34% of higher earners and 47% of people in lower wage brackets saying they’re cutting back on spending. 

For some, that involves making lifestyle changes: 52% are using less energy in the home, 44% are walking and cycling more, 41% are preparing meals at home as eating out and takeaways are scrapped.

Why it matters

While everyone is conscious of the changing economic climate, many may feel that they are not yet at a crunch point regarding their own finances, says Jason Mander, Chief Research Officer at GWI. But “the consumer dilemma is starting to make itself known and there are choices being made throughout the purchase cycle, even for those who are feeling relatively comfortable”.

Brands need to monitor the situation closely as it develops and understand the daily choices that consumers are having to make.

Key quote

“Britain faces a stark new economic reality and history shows that consumers will not hesitate to retrench and tighten their purse strings when the going gets tough” – Joe Staton, Client Strategy Director, GfK.

Sourced from GfK, GWI, ONS

Winners announced for WARC Awards for Effectiveness 2022

In Cannes last night, a total of eight Grands Prix were awarded at the second global WARC Awards for Effectiveness, in association with LIONS, 

Among the agencies receiving the top accolade were Colenso BBDO Auckland, FCB New York, Havas Business London, Leo Burnett Beirut, McCann Paris, MediaCom Singapore, Ogilvy Frankfurt, and Publicis New York.

Brands honoured included ABAAD, Deutsche Bahn, Jif, Maersk, Michelob Ultra, SK-II, Skinny, and The Lebanese Breast Cancer Foundation. 

Winners include five global campaigns and six regional (Asia x1, Europe x1, MEA x2, North America x2). US campaigns picked up the highest number of awards (x9). Australia, India, Lebanon, New Zealand and Saudi Arabia each won two awards. Belgium, Brazil, Canada, China, Egypt and Greater China have picked up one award. 

In all there were 36 winners across the six categories that make up the WARC Awards for Effectiveness, rigorously judged using the Creative Effectiveness and the B2B Effectiveness Ladders, unique tools providing a consistent approach and global language to benchmark effectiveness.

Category highlights

Customer Experience category

• Three awards: 1 Grand Prix, 1 Silver, 1 Bronze
• Winning agencies: FCB New York, Leo Burnett Beirut, Mindshare Shanghai

The Grand Prix was awarded to FCB New York for Michelob Ultra. The beer brand grew sales by digitally transporting basketball fans to the court during the NBA games in the USA. 

Business-to-Business category 

• Five awards: 1 Grand Prix, 1 Gold, 2 Silver, 1 Bronze
• Winning agencies: Havas Business London, Stein IAS New York, Mindshare Shanghai/Dentsu Beijing, FCB New York, DDB Mudra Mumbai

The Grand Prix was awarded to Havas Business London for Maersk. The shipping and logistics provider shifted the conversation from risk to opportunity with its global campaign to produce extraordinary results for the company.

Collaboration & Culture category 

• Seven awards: 1 Grand Prix, 1 Grand Prix for Good, 1 Gold, 1 Silver, 3 Bronze
• Winning agencies: Publicis New York, McCann Paris, 360i New York, Mischief @ No Fixed Address New York, Wieden & Kennedy New York, In house - Government Of United Arab Emirates, Energy BBDO Chicago

The Grand Prix was awarded to Publicis New York for Jif. The US campaign saw the peanut butter brand partner with rap legend Ludacris to improve category share, brand perception, increase share of voice and brand searches.

The Grand Prix for Good was awarded to McCann Paris for The Lebanese Breast Cancer Foundation. Reaching two million people, the non-profit partnered with a traditional Lebanese baker and a gynaecologist to increase awareness of self-examination, 

Instant Impact category 

• Ten awards: 1 Grand Prix, 2 Gold, 2 Silver, 5 Bronze
• Winning agencies: Ogilvy Frankfurt, VMLY&R Melbourne, Alma Miami, McCann New York, Leo Burnett Chicago, Sunset DDB São Paulo, The Monkeys Sydney, Impact BBDO Dubai, FP7 McCann Cairo, Leo Burnett Chicago

The Grand Prix was awarded to Ogilvy Frankfurt for Deutsche Bahn. The rail operator collaborated with state tourism associations and motivated Germans to holiday in Germany and get there by train during COVID-19.

Sustained Growth category 

• Six awards: 1 Grand Prix, 1 Grand Prix for Good, 2 Gold, 1 Silver, 1 Bronze
• Winning agencies: Colenso BBDO Auckland, Leo Burnett Beirut, Havas New York, LDV United Antwerp, The Script Room, DDB Aotearoa Auckland

The Grand Prix was awarded to Colenso BBDO Auckland for Skinny. The mobile operator used a multichannel campaign based on local people with famous names to relaunch its brand and grew credibility, consideration and sales in New Zealand.

The Grand Prix for Good was awarded to Leo Burnett Beirut for ABAAD (Dimensions) – Resource Center for Gender Equality. The NGO for women’s rights saw increased calls to its helpline and won breakthrough law reforms to protect women and girls in Lebanon with on-ground activities and online influencer and celebrity videos.

Brand Purpose category 

• Five awards: 1 Grand Prix, 1 Gold, 1 Silver, 2 Bronze
• Winning agencies: MediaCom Singapore, Havas Turkey, Impact BBDO Dubai, AMV BBDO London, Zulu Alpha Kilo Toronto

The Grand Prix was awarded to MediaCom Singapore for SK-II. The skincare brand, perceived as one for older women, launched a global campaign to increase brand awareness, and grow search and consideration, leading to new users and sales.

Netflix Co-CEO sketches advertising principles, holds back on detail

Any advertising product that Netflix comes up with will start in the US, will stay light, and will just be one of many iterations, according to co-CEO and chief content officer Ted Sarandos. The principles arrive at a time that certain advertising service providers are being touted as launch partners.

Why it matters

Co-CEO Reed Hastings has long resisted advertising, but with investor demands for growth becoming louder, the company now recognises that it has “left a big segment on the table”. And with the monthly fee becoming too much for some people during a cost-of-living crisis, there is now space for an advertising tier.

Speaking on stage at the Cannes Lions International Festival of Creativity, Sarandos stressed that any product would aim to be more integrated and less interruptive than the current TV ad experience. “I want our product to be better than TV,” he stated.

Signals in the noise

Sarandos was grilled on his firm’s stock performance (macroeconomic issues, he said) and streaming more widely before questioning turned to the elephant in the room.

• When: That the timing of the festival was “a bit off” relative to Netflix’s ad plans suggests we won’t have to wait long for more details. In Sarandos’ own words, we hear these will be available “sooner than later.”
• Who: A story in the Wall Street Journal suggested that Google and NBCUniversal were the frontrunners to take on the work. Sarandos was, of course, equivocal, saying the business was prioritising a “pretty easy entry to market” but that it was “talking to all of them”.
• Looking ahead: More interesting was his suggestion that if advertising “becomes important for us” then the company would consider building out its own ad systems.
• Aims: “What we do at first will not be representative of what the product will be ultimately,” he explained. Netflix will start light and “keep it simple”.

Why now?

It comes down to a mixture of economic imperatives and the belief that the audience-matching capability that has become a hallmark of the Netflix experience, along with its creative chops, can help fuel a compelling product. There’s also the fact that younger viewers, accustomed to ads on social apps and YouTube, are simply more tolerant of advertising, especially when it’s done well.

A question of sport

Will Netflix do news? Sarandos was firm that there is no real ambition within Netflix to get involved here. Sport, however, is “not a foregone conclusion”, but, to date, its involvement in sports through sport documentaries is more comfortable territory.

Reporting by S.P.T.

Creativity matters in healthcare

The urgency of the COVID pandemic put healthcare brands in the spotlight and allowed them to lean into creativity at a pivotal time, according to Patricia Corsi, chief marketing officer at Bayer, the consumer healthcare giant. 

Why it matters

Healthcare marketing has often been stereotyped as dull – largely due to the many advertising regulations brands face in the category – but creativity still has the power to level-up marketing effectiveness even in regulated categories. 

“We have many bad things that happened with COVID but one good thing that happened is that it was a wake up call for the creative industry – and us as clients – to see the role that we really have to play,” Corsi said in a discussion at the Cannes Lions International Festival of Creativity (Bayer is the Jury Chair of the Health and Wellness Lions). 

Bayer is encouraging healthcare marketers to break out of conservative mindsets, which often come from a fear of risk. “It’s not easy,” Corsi acknowledged, but added that “without pressure, there are no diamonds”.

Insights

• Breaking taboos and having conversations to help people to live healthier lives are really important. 
• Success in healthcare marketing requires building coalitions and partnerships, while still competing to grow the brand.
• Instinct matters. There’s no need for ad testing – prioritise ideas that solve problems. 
• Build a marketing excellence team focused on creativity. 

Key quote

“I truly believe we cannot solve the biggest problems without creativity. But I don’t think they have to be complicated. It’s sometimes the simplest idea that is the best…. Let’s have the courage to take that first step” – Patricia Corsi, chief marketing officer at Bayer.

Seven in ten ad campaigns fail to generate meaningful ROI

Seventy percent of ad campaigns generate a return on investment (ROI) that calls their profitability into question, according to research presented at the Cannes Lions International Festival of Creativity 2022.

That finding came from a study incorporating 343 campaigns, accounting for £5bn in adspend, in the Advertising Research Community (ARC) database, an effectiveness resource developed by Dr. Grace Kite, the founder of UK-based analytics consultancy Magic Numbers.

About the research

• All the featured campaigns have been subject to econometric modeling to assess the drivers of their ROI, whether good or bad.
• The ARC database also mixes award-winning programs with initiatives which have not received such honours.
• As such, it represents “everyday” work alongside the best-in-class output that is put forward to compete for industry-level recognition.

A “concerning” trend

• In all, seven in ten of the ARC campaigns returned less than £2 in revenue for every £1 spent. (WARC subscribers can read more here.)
• This is a “concerning” figure, reported Stuart Heppenstall, principal consultant at marketing effectiveness consultancy Data2Decisions, who presented the findings.
• “Marketing often is paid for out [of] profits, and has to show that it can pay for itself,” Heppenstall said in a session held by WARC, entitled “Creative Commitment: New Learning from the ARC Database”, at Cannes Lions.

ABInBev and FCB take Creative Effectiveness Grand Prix

A long-running campaign for the beer brand Michelob Ultra has won the top gong at Cannes in the creative effectiveness category, where campaigns that have already been creatively awarded compete on the business impact the work has had.

The winning campaign

Michelob Ultra, along with FCB agencies in Chicago and New York, needed to grow volume sales for the organic beer brand. That meant not only recruiting more drinkers to shift their preference to organic beer, but also helping farmers shift their practices to organic, not a simple exercise in the context of US agriculture. 

The brand not only committed to be the first customers of those farmers willing to make the three–year transition to organic, but agreed to pay a 25% premium for their non-organic crops during the transition period (for use in other brands of beer) so they didn’t lose money. 

Why it matters

Judges praised the “game-changing” campaign, jury chair Raja Rajamannar told reporters ahead of the announcement at a ceremony last night. In particular, they expressed admiration for the brand’s commitment and lasting impact, which comes on top of the kinds of commercial and social impact that have been the hallmarks of top awards in recent years.

Rajamannar explained that a significant part of the discussion among the jury centred on the definition of effectiveness/ They they concluded that it must have:

• a lasting impact on sales;

• an impact on the business;
• an impact on the brand’s reputation;
• a competitive advantage for future growth.

Golds

Gold-awarded campaigns also reflected these precepts, even if the difference between the top award and the next best was nailing a difficult set of demands.

• Burger King: Moldy Whopper, by INGO Stockholm, DAVID Miami, Publicis Romania
• The Female Company: The Tampon book, by Scholz & Friends
• Dove: Courage is Beautiful, by Ogilvy London
• Canadian Down Syndrome Society: Project Understood, by FCB Canada
• Association L’Enfant Bleu: Undercover Avatar, by Havas Play

Silvers

• Cheetos: Can’t Touch This, by Goodby Silverstein & Partners 
• Three: The Island, by Boys & Girls (Dublin)
• Michelob Ultra: Michelob Ultra Courtside, by FCB New York

Bronzes

• Renault: Village Electrique, by Publicis Conseil
• McDonald’s: The Travis Scott Meal, by Wieden+Kennedy New York
• Propuesta Civica: #StillSpeakingUp, by Publicis Mexico 
• Canadian Women’s Foundation: Signal For Help, by Juniper Park\TBWA
• Johnson & Johnson: Stayfree Project Free Period, by DDB Mudra 
• Corona: The Match of Ages, by We Believers

WARC subscribers can click here to read the Grand Prix and all the winning case studies . 

APAC ad economy to grow 8% despite economic uncertainty: report

The Asia Pacific advertising economy will grow by 8% this year, following the 2021 rebound (18%) and versus the global forecast of 9%, powered by large markets such as China (8%) and India (15%), according to research by media intelligence company Magna.

Why it matters

APAC’s experience with COVID-19 throughout 2021 has been mixed, causing pullbacks on advertising activity, but the pandemic and a home-centric lifestyle have changed consumer behaviour: more streaming, more e-commerce and more integration of digital platforms is driving digital advertising spending.

Key insights

• In 2023, the Asia Pacific ad market will expand by 7%, slightly higher than the global average of 6% and in line with pre-pandemic long-term regional growth.
• APAC advertising revenues next year will increase to US$273bn – 35% above the pre-pandemic spending level, driven by digital advertising growth (plus 12%).
• In 2022, China’s digital ad formats are seeing spending increase by 11% to reach CNY 652bn (US$101bn), representing 81% of total advertising budgets.
• Australia’s advertising market will grow by 10% this year to reach A$22.8bn (US$17.1bn), with digital ad spending increasing 13% to A$16.6bn or 73% of total adspend.
• Japan’s linear ad revenues (linear TV, radio, print, OOH) are up 3% to 2.6tn yen (US$24.3 billion), as TV (+4%), OOH (+3%), radio (+1%) experience stability or slow growth in ad revenues.
• The Indian ad market bounced back by 22.5% in 2021, and India will be the fastest-growing market in the top 15 ad markets this year and next to remain the 12^th-largest market globally.
• Singapore’s ad sales are up 11% at S$2.7bn (US$2bn) in 2022, with linear advertising revenues 8% higher, representing 60% of total budgets following the 15% rebound in 2021.
• The Indonesian ad market will grow 10% this year to 133tn rupiah (US$9.3bn), with ad spending to continue its strong performance heading into 2023 (7% growth expected).

Background

The Magna research is media-centric and monitors net media owners’ advertising revenues, based on a bottom-up analysis of financial reports and data from media trade organisations, with other ad market studies based on tracking ad insertions or consolidating agency billings.

How marketers can tackle the polycrisis

Faced with global food shortages, soaring energy bills, the after-effects of the pandemic and a looming recession, marketers need to fight the urge to reduce costs, says the CEO of Analytic Partners, who argues that “cut your media spend, and you’ll cut your ROI”.

Nancy Smith, in a talk at Cannes Lions, explained that the message from the measurement and marketing analytics company’s data was clear: “look to the past to inform your future and don’t go dark in times of crisis.”

Past learnings

Analytic Partners’ ROI Genome has shown that:

• Recessions do not mean lower ROIs – 54% of brands saw ROI improvements during the last recession.
• Recessions do not mean diminishing returns – of the brands that increased marketing investment in the last recession, 60% improved marketing ROIs.
• Media drives growth – brands that increased media investment realized around 17% growth in incremental sales.
• Media helps brand building – 52% of brands that increased marketing investment saw year-to-year ROI growth over a two-year period.
• Reducing media investment exacerbates losses – on average, brands that reduced media investment suffered an 18% loss in incremental sales.

(Read the ROI Genome Intelligence Report on The Advertising Evolution here.)

Two golden rules 

During a period of media inflation there are two golden rules for brands, according to Smith: 

• multi-channel approaches are the most effective; 
• the halo effect – how advertising one product boosts others in your portfolio – is significant.

“Media investment can lessen price sensitivity during times of price increase,” she said. “We have seen that brands with high media investment in media are experiencing a lower sensitivity to price increases, less loss in sales.”

​

Emotion critical to impactful brand interactions

Consumers who have a very positive emotional response to interactions with a brand are more likely to trust, forgive, recommend and purchase it more as a result, according to a new study.

How the study worked

• The XM Institute, a unit of research firm Qualtrics, conducted an online survey featuring a demographically representative sample of 9,055 consumers.
• Members of its panel rated the level of perceived success, effort and emotion from their recent interactions with companies featured in a set of 22 industries.
• They also stated how likely they were to recommend, trust, forgive and buy more from these brands as a result of their experiences.

Emotional connection drives purchase likelihood

• A high emotional rating, indicating a very positive feeling, was correlated with the strongest likelihood to trust, recommend, forgive and buy more from a brand.
• Eighty-six percent of customers who reported this kind of emotional connection in a brand interaction were likely to purchase more in the future.
• That figure hit 81% for interactions that were low-effort and frictionless, and 80% for the complete success of an interaction.
• Consumers who were “delighted” by an interaction were 10.3x more likely to recommend a brand than someone who was “upset”.
  
• People registering high emotional scores were also more likely to forgive, trust and recommend brands than people reporting equivalent satisfaction with effortlessness and success.

Companies underperform in emotional terms

• People who found it “very easy” to interact with a brand were 8.1x more likely to recommend this product.
• That total hit 6.3x for shoppers who “completely succeeded” in reaching their goal.
• Shoppers were nearly 5x more likely to trust and buy more from a company following a positive experience when measured against a negative one.
• More consumers, however, reported that companies performed well in terms of delivering successful and easy interactions than in terms of the emotional component.

Sourced from XM Institute

DEI needs more buy-in to thrive

To be successful with DEI initiatives and drive real change, brands need to communicate expectations to employees across the business, not just the top-tier of executives or marketing departments, say two CPG brand leaders.

Why it matters

Gen Z consumers believe that diversity is table stakes for brands across a variety of intersections including gender, race, ability and sexual orientation. Brands need to address these issues internally as well as externally.

“Part of setting the tone is making sure that the objective is clear and that there is visible support at the top, and that there’s action that goes down [through the company] as well,” said Anton Vincent, President at Mars Wrigley North America, in a conversation this week at Cannes Lions International Festival of Creativity.

“To say I want a diverse workforce, or I want more women in management – I need to have people are reinforcing that, in some cases [making changes] that can affect pipelines for recruiting, maintaining, and supporting… it has to be very clear.” 

Unilever’s Aline Santos comes at it from a slightly different angle. “‘No seniority, no priority’ is a phrase that I use a lot, because I totally believe it when we talk about equality, diversity and inclusion,” she said. “If we have seniority [buy-in], we have it all, because the grassroots now understand what needs to be done and they are fine with it.”

Key insights

• Communicate clearly when measurable change in DEI targets is expected to be delivered across the organisation.
• It’s not enough to focus on gender – race, ability, sexual orientation and other intersections also need to be addressed to have a truly inclusive and equitable brand. 
• The tone needs to be set from the very top and reflected throughout: if the leadership is not there mentally, emotionally, or willing to invest money in change, success becomes very hard. 

Final thought 

“If we wait for governments and NGOs to solve all the problems that we have in the world, that’s not going to happen. Only the private sector has the muscle, the strength, the power, the money and the talent to do it” – Aline Santos, Chief Brand Officer and Chief Diversity and Inclusion Officer at Unilever.

Brands need to tap inter-generational loyalty

Children continuing the shopping habits of their parents when they set up their own household is the biggest driver of FMCG unit growth, according to Kantar.

In a new study, Brands of the Decade, the research company analyses ten years of actual global shopping habits and finds that increasing penetration – the percentage of households that choose a brand – is key to growth.

Why it matters

Across 11 ‘Brands of the Decade – the brands which saw the biggest growth in their respective categories – growth in penetration accounted for an average of 87% of their growth, meaning that ensuring children establishing their own homes make the same shopping choices as their parents is key to long-term success.

Takeaways 

• The Brands of the Decade accounted for 25.1 billion (6.6%) of purchases, up from 19.2 billion (5.8%) in 2012. The growth rate of these brands was 31% over the decade, almost double the total branded market’s growth rate.
• The number of households buying Coca-Cola – the most-chosen brand over the past decade – increased 17% in that time, in line with household growth, to around 540 million.
• The average number of FMCG brands chosen per year has remained consistent at 55 brands per household – breaking into this ‘go-to groceries’ list is key to growth for brands, big and small. 
• In 2021, the average household purchased 3.2 of the Brands of the Decade, compared to 2.8 in 2012 (but only two of the fifty biggest brands, Dove and Vim, have consistently grown in every year of the past decade).

 Key quote

“There is finite space in consumers’ baskets. Securing a spot on the list of ‘go-to groceries’ – which is unique to each household – is a must. If you’re out of the list, you’re out of consumer’s choice” – Guillaume Bacuvier, CEO of Kantar Worldpanel.

Sourced from Kantar [Image: Kantar]

Over 80% of ads fail to reach 'attention threshold'

Eighty-five percent of ads fail to reach the “attention threshold” that is needed to make an enduring impact from a brand-building perspective, according to research discussed at the Cannes Lions International Festival of Creativity 2022.

Why it matters

Attention is an important currency for brands to consider, as it focuses on whether a consumer actually sees an ad, as well as their level of engagement. Through connecting this kind of data to sales metrics, marketers can determine the short- and long-term impacts of attention on key performance indicators.

Takeaways

• Karen Nelson-Field, founder/CEO of measurement firm Amplified Intelligence, discussed a study of 130,000 ads undertaken by the company during a session held by WARC at Cannes Lions, entitled “The triple jeopardy of attention”. (WARC subscribers can read more details here.)
  
• Its analysis found that the “attention threshold” for advertising that has an enduring impact in terms of building brands came in at 2.5 seconds.
• The bad news: eighty-five percent of ads did not reach that critical benchmark – which harms their capacity to enhance mental availability, or the likelihood of a brand coming to mind in a purchase situation.

Quick take

“If you want to grow your brand, you need to hit the threshold” – Karen Nelson-Field, founder/CEO, Amplified Intelligence.

APAC marketers see B2B 'creative confidence' growing: survey

Nine out of ten B2B marketing leaders in APAC say B2B “creative confidence” is growing, with the level of creativity increasingly on par with B2C counterparts, according to a study by LinkedIn.

Why it matters

B2B marketers in APAC are moving away from traditional B2B tactics as priorities, like performance marketing and lead generation, and turning to creative storytelling instead to increase brand stickiness and stand out in a unique market characterised by emotionally-driven purchase decisions.

Key insights

• 75% of APAC marketers believe B2B marketing is more challenging than B2C marketing – higher than the global average of 56%.
• Against this backdrop, B2B brands in APAC are increasingly prioritising brand building to stand out.
• About seven in 10 (69%) of these marketers believe brand building is more important in B2B than B2C versus global average of 55%.
• They recognise that creativity is essential to long-term brand building (34%) and drives memorability among customers (28%).
• APAC is the most competitive region to hire creative talent – 67% find it challenging to hire creative talent vs 57% global average.
• Another challenge to attracting talent – 87% worry the best talent is drawn to working in consumer marketing over B2B marketing.

Quote

“APAC is one of the most unique markets for B2B marketing, with our research showing that purchasing decisions are more emotionally driven here than elsewhere in the world. In this landscape, brand building underpinned by creative storytelling is critical to capture the attention of B2B audiences” – Sarah Tucker, Head of APAC Marketing, LinkedIn Marketing Solutions.

Background

LinkedIn commissioned YouGov for an online survey of 1,629 senior B2B marketing decision makers in the US, UK, France, Germany, Netherlands, Italy, Spain, UAE, Saudi Arabia, Brazil, Australia, India and Singapore from 28 April to 25 May 2022.